Many of you are wondering how the new tax rate changes will impact you. Obviously, we can’t answer that off the top of our heads as each person’s situation is different, and in many cases, experts are still trying to figure out how the changes will play out. One of the biggest changes is the corporate tax rate reduction to a maximum of 21% versus the maximum tax rate for individuals being around 37%.
The new tax legislation becomes effective January 1. That means many business owners are now considering whether to reorganize themselves as C corps.
For most new businesses and business owners, keeping it simple is key. After all, launching a new business requires attention to detail and doing many things right. For that reason, most new businesses start out simply as a sole proprietorship or a Limited Liability Company (LLC). As a successful business matures, however, the savvy owner should call time out to consider the S Corporation form of business.
The owners of an active business operating as a S Corporation enjoy a distinct tax advantage over other types of tax entities, particularly sole proprietors, partnerships and LLCs. For the owner of a profitable sole proprietorship, partnership or LLC, the earnings are subject to both income tax and the 15.3% self-employment (SE) tax, which funds Social Security benefits and the Medicare health system. This SE tax is often unanticipated, particularly for new entrepreneurs, and can cause havoc with cash flow at tax time. Read More
WASHINGTON — The Internal Revenue Service announced today that S corporations are subject to the extended three year holding period for applicable partnership interests and that regulations will be issued soon.
Carried interests are ownership interests in a partnership that share in the partnership’s net profits. Carried interests often are issued to investment managers in connection with the investment manager’s services. These interests often result in the holder receiving capital gains which are taxed at a lower rate, rather than ordinary income. Read More
Many of you are wondering how the new tax rate changes will impact you. Obviously we can’t answer that off the top of our heads as each person’s situation is different, and in many cases experts are still trying to figure out how the changes will play out. One of the biggest changes is the corporate tax rate reduction to a maximum of 21% versus the maximum tax rate for individuals being around 37%. Read More
Many US entrepreneurs set up an LLC in the beginning, because it is straightforward and not too expensive. Generally, this is a good approach for the start as LLCs offer liability protection and other advantages. However, entrepreneurs are often not aware that with increasing income, switching from LLC to S Corp makes financial sense.
Why you should consider switching from LLC to S Corp
As your income from your LLC increases, so does the self-employment tax. You earn more, you pay more tax, but your ability to contribute to retirement accounts does not change. This is where converting the LLC to S Corp has advantages. Read More
The T1134 and T1135 are a sample of Canadian foreign information returns like the U.S. 8938, 5471 or 8865.
A number of Canadians are investing in the U.S. real estate market with a U.S. limited partnership whose limited partners are solely Canadian residents and the general partner is a U.S. C corporation whose shareholders are also Canadian residents.
For those who want limited liability protection, this type of Read More
September 15 – Corporations
File a 2014 calendar year income tax return (Form 1120 or 1120-A) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension.
September 15 – S Corporations
File a 2014 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension.
September 15 – Corporations Read More
If you have a calendar year 2014 partnership, S-corporation, or trust return on extension, don’t forget the extension for filing those returns ends on September 15, 2015.
Pass-through entities such as Partnerships, S-corporations, and fiduciaries (trusts, estates) pass their income, deductions, credits, etc., through to their investors, partners, or beneficiaries, who in turn report the various items on their individual tax returns. Partnerships file Form 1065, S-corps file Form 1120-S, and Fiduciaries file Form 1041, with each partner, shareholder, or beneficiary receiving a Schedule K-1 from the entity that shows their share of the reportable items.
If all of the aforementioned entities could obtain an automatic extension to file their returns Read More
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